Do you need an accountant or bookkeeper? Your guide to choosing

Published Wednesday 7 January 2026

Table of contents

• What does a bookkeeper do?
• What does an accountant do?
• Bookkeeper vs accountant: key differences
• Here's what you're missing
• Why you need to get an accountant or bookkeeper
• When to hire a bookkeeper
• When to hire an accountant
• Get the power to make better decisions
• Boost your profitability
• Getting the best value from accountants and bookkeepers
• Getting an accountant or bookkeeper is a business decision
• FAQs on hiring accountants and bookkeepers

Key takeaways

• Recognize that bookkeepers handle daily financial tasks like recording transactions and managing payroll, while accountants provide strategic analysis, tax planning, and business growth advice based on those records.
• Implement automated invoicing and bookkeeping systems to reduce manual processing time by 80% and eliminate the costly cycle of catching up on financial errors and missed deadlines.
• Prioritize hiring professional help when you spend several hours monthly on bookkeeping instead of core business activities, or when your financial records become disorganized and fall behind.
• Focus your accountant or bookkeeper on high-value activities like tax optimization and profit improvement rather than low-value catch-up work like error correction and manual reconciliation.

What does a bookkeeper do?

A bookkeeper focuses on the day-to-day financial tasks of your business. Think of them as the person who keeps your financial records accurate and organised.

Their main job is to record all the money that comes in and goes out:

• Recording daily financial transactions
• Managing payroll
• Sending invoices to customers and following up on payments
• Paying supplier bills
• Reconciling bank accounts to make sure everything matches up

Having a bookkeeper ensures your books are always up-to-date, which is essential for knowing where your business stands financially.

What does an accountant do?

An accountant takes a higher-level view of your finances. While a bookkeeper records the data, an accountant interprets, analyses, and reports on it.

Accountants help you understand the bigger financial picture and make strategic decisions:

• Preparing and filing tax returns
• Analysing financial performance and providing insights
• Creating budgets and financial forecasts
• Offering strategic business advice on growth and profitability
• Ensuring you comply with financial regulations

An accountant helps you plan for the future, save on tax, and grow your business with confidence.

Bookkeeper vs accountant: key differences

It's easy to get them confused, but their roles are distinct. A bookkeeper manages your daily financial records, while an accountant provides analysis and strategic advice based on those records.

Think of it this way: a bookkeeper builds the financial foundation, and an accountant uses that foundation to build a plan for your business's future. Many businesses start with a bookkeeper and then hire an accountant as they grow and their financial needs become more complex.

Here's what you're missing

DIY financial management creates significant risks for small businesses. As a business owner, you handle most tasks yourself due to budget constraints.

The key question is whether doing your own books creates more costs than hiring help.

Missing professional help costs you money and creates these specific risks:

• Missed tax deductions: Fail to claim valid expenses, reducing your profits
• Invoice delays: Fall behind with billing and chasing unpaid accounts
• Tax penalties: Underestimate bills and face government fines
• Compliance failures: Submit returns late, triggering penalty charges
• Data errors: Spend hours fixing mistakes in your books
• Poor decisions: Lack reliable information for business choices

Why you need to get an accountant or bookkeeper

Professional financial help delivers immediate benefits to your business. Here are three key areas where you'll see instant improvements:

Clean up your books once and for all

DIY bookkeeping typically happens only when you find spare time. This inconsistent approach, which can be improved by automation that can slash the time it takes to process invoices by 80%, creates four major problems:

• Data errors: Rushed entries contain mistakes
• Lost receipts: Missing proof of business expenses
• Missed deductions: Fail to claim valid tax breaks
• Outdated records: Books lag behind actual business activity

Professional cleanup gives you accurate, documented financial records. They'll also implement software systems that automate future data entry.

This prevents you from falling behind again. You'll save money by avoiding future data-entry costs.

Do your tax well and on time

Tax deadline management eliminates penalties and stress. Professional accountants work months ahead of deadlines, ensuring smooth filing processes.

You'll never face late-payment penalties again. Tax season becomes routine rather than stressful.

Tax planning reduces your annual tax bill significantly. Engage an accountant early in the year for maximum savings.

They'll develop strategies that legally minimize your tax burden and keep more profits in your business.

Improve your invoicing and cash flow

Inefficient invoicing directly damages your cash flow. Poor billing systems delay payments and create money shortages, particularly since manually processing an invoice takes an average of 14.6 days, according to research from The Aberdeen Group.

This basic issue undermines many otherwise successful businesses.

As an example, think of the plumbing and heating engineers that might service a building. About two weeks after they've been, they send an invoice, which gives 30 days to pay. If the business owner pays on time, their business is waiting more than six weeks for the cash, even though the employees who did the work were paid the week the job was done.

Automated invoicing systems deliver three key improvements:

• Faster billing: Send invoices immediately after work completion
• Real-time tracking: Check payment status anytime, anywhere
• Payment flexibility: Offer customers multiple payment options

Accountants and bookkeepers can also give you good advice on invoice payment terms, to help reduce the time you spend waiting on money to come in.

When to hire a bookkeeper

Not sure if it's the right time? Here are a few signs that you could use a bookkeeper:

• You're spending several hours a month on bookkeeping instead of running your business.
• Your financial records are disorganised or falling behind.
• You're not sure if you're invoicing customers correctly or on time.
• You find it stressful to manage bills and expenses.

Hiring a bookkeeper early can set up good financial habits and save you from headaches later on.

When to hire an accountant

An accountant becomes essential as your business goals get bigger. Consider hiring one when:

• You need to prepare and file your annual accounts and tax returns.
• You're planning to apply for a business loan or seek investment.
• You want strategic advice on how to improve profitability or manage cash flow.
• Your business is growing, and you need help with financial forecasting and budgeting.

An accountant can be a valuable partner in navigating complex financial decisions and planning for long-term success.

Get the power to make better decisions

DIY bookkeeping rarely happens on schedule. Business priorities interrupt financial tasks, and manual entry creates errors.

The result is unreliable, outdated business information when you need it most.

Outdated financial data prevents effective business management. You can't determine current profitability or available cash for investments.

This uncertainty limits growth opportunities and strategic decisions.

Professional financial management provides real-time business visibility. You'll track income and expenses as they occur.

This gives you clear insight into current cash flow and long-term profitability trends.

Business failure statistics show 80% of businesses fail within five years. The AVN research identifies three main causes:

• Poor record keeping: No experience maintaining financial records
• Financing ignorance: Lack of funding and cash flow knowledge
• Tax compliance failures: Incorrect tax payments and reporting

An accountant or bookkeeper can help you overcome these common hurdles.

Boost your profitability

Strategic financial guidance unlocks business growth potential. Accountants eliminate unnecessary costs and optimize cash flow management.

More importantly, they identify your specific profit drivers and develop improvement strategies.

Key performance indicators (KPIs) measure activities that directly increase revenue and profit. Improving these metrics grows your business systematically.

KPIs in action

As an example of how this might work, think of a roofing business whose revenue is tied to the number of new jobs they win. They can't win any unless they give an estimate, and they won't get to give an estimate unless they answer the phone. That's not always easy to do when you're working at height.

So an accountant might measure:

• calls answered
• estimates given
• jobs won

If the relationship between these three things was strong enough, an accountant would encourage the business owner to get an answering service. They'd even tell you how much return you could expect from the investment.

KPIs like these can easily be tracked using apps like Futrli (previously known as Crunchboards) or Spotlight Reporting. An accountant will set them up for you, so you can always see where to improve your business.

Getting the best value from accountants and bookkeepers

As with any consultant you hire, you want to get maximum bang for your buck from an accountant or bookkeeper. Try to keep them focused on problems or opportunities that can make your business more profitable.

Return on investment determines professional value. Avoid these low-value, time-consuming tasks:

• Error correction: Finding and fixing bookkeeping mistakes
• Bank reconciliation: Matching transactions manually
• Control account reconciliation: Balancing subsidiary ledgers
• Tax deadline rushing: Last-minute compliance work

These are all important things, but they don't add a lot of value to your business. It's catch-up work. You'll burn through your accounting budget without getting any of the truly valuable services, especially when manual processing costs around $12.42 per invoice versus just $2.65 for an automated one.

When you get an accountant or bookkeeper, find one that can automate your bookkeeping. There are accounting software systems like Xero that automatically capture all your business data (including sales, expenses, payroll, inventory, and more) with minimal human involvement.

This will mean paid professionals spend far less time fixing old problems, and more time saving you money and improving your business. It's all about return on investment. No one should understand that more than an accountant.

Getting an accountant or bookkeeper is a business decision

Business troubleshooter, Sir John Harvey-Jones said "Leaders should only do what only they can do." Don't let bookkeeping distract you from your core work. It's not where you'll add value to your business.

A paid professional, on the other hand, has the expertise to:

• lower your tax burden
• avoid fines, interest and audits
• identify and eliminate unnecessary costs from your business
• help you measure and improve business performance

They'll free you to work on the business, which is where you'll be able to make the biggest difference. Plus they'll allow you to spend more time with family and friends, which is a really great perk of making a good business decision.

Ready to make that decision? We can get you connected with an experienced accountant through our Xero advisor directory.

FAQs on hiring accountants and bookkeepers

Making the decision to hire professional help can bring up a few questions. Here are some common ones from business owners.

Do I need a bookkeeper or an accountant?

It depends on your needs. If you need help with daily financial admin like recording transactions and managing invoices, a bookkeeper is a great start. If you're looking for tax planning, financial analysis, and strategic advice to grow your business, you'll want an accountant.

Should I hire both a bookkeeper and an accountant?

Many growing businesses use both. A bookkeeper keeps the daily records clean, which allows an accountant to work more efficiently on higher-level strategy and tax planning. They form a powerful team to support your business's financial health.

How much do bookkeepers and accountants typically cost?

Costs can vary based on their experience, your location, and how much work is involved. Many offer fixed monthly fees, which makes it easier to budget. It's best to think of it as an investment that can save you time and money in the long run.

When is the best time to hire professional help?

The sooner the better. Getting help early establishes good financial practices and prevents small issues from becoming big problems. But it's never too late to get your finances in order. Whether you're just starting or have been in business for years, the right professional can make a big difference.